Congressman Kennedy on Trade, Healthcare and Education

This volume marks the approximate one year anniversary of Newsmakers. As stated in its premier, this series’ goal is to inform and connect the Brimmer and May community to the events that shape our world. We remain committed to that goal, and look forward to introducing new issues and new media to present those issues in the year to come.

Thus, in its eighth volume, Newsmakers features Congressman Joe Kennedy, a representative of the 4th district of Massachusetts, home to many Brimmer and May students, stretching from greater Boston suburbs Newton and Brookline to the South Coast.

Taking over Barney Frank’s seat in 2012, Congressman Kennedy is the latest member of his family to enter public service. Joe is a nephew of former MA Senator and presidential candidate Ted Kennedy, the eldest grandson of longtime MA Senator “Bobby” Kennedy, and the great nephew of President John F. Kennedy. Kennedy, a Democrat, now sits on the House Committee on Energy and Commerce and is an active supporter of Hillary Clinton’s presidential campaign.

Kennedy on STEM

An acronym for science, technology, engineering and mathematics education, STEM has been gaining popularity among the nation’s education reform advocates in recent years due, in large part, to research that predicts job openings and wages in STEM fields increasing at a faster rate over the next decade than their non-STEM counterparts.

STEM is particularly appealing to Bostonians because its economy is positioned to capture the good-paying jobs that it promotes. As noted in Senator Barrett on Environmental Policy, Newsmakers sixth installment, the greater-Boston area has a knowledge-based economy, meaning that growth is driven by jobs involving technology, healthcare, and education, as opposed to manufacturing or agriculture.

Many of Kennedy’s constituents, thus, are part of the “STEM economy”. “Communities that are very much connected to the Boston-based economy,” Kennedy says, “such as Brookline, Newton, Wellesley, Needham, Dover—they have got strong economic prospects going forward. Their schools have the resources and technology to tap into the potential of their students.”

To that end, STEM leads to good career opportunities for less educated workers; half of all STEM jobs are available to workers without a four-year college degree, and pay $53,000 a year on average, a wage 10 percent higher than jobs with similar educational requirements in non-STEM fields. Kennedy says that STEM serves “economic justice” to constituents outside the Boston economy by helping “students who are from less affluent communities gain access to the resources, skills, classes, mentors, facilities that you need to build a career.”

Expanding STEM has been a focus of Kennedy’s. In 2013, he introduced the STEM Gateway Act, a 12-page bill designed to increase the participation of women, minorities and low-income students in STEM fields by creating a competitive grant program.

Kennedy on Healthcare

The Affordable Care Act (ACA) was the biggest overhaul of America’s health system since the 1960’s when the Johnson administration authored Medicare and Medicaid in its ‘War on Poverty.’ Passed in 2010 on a party line vote, the ACA, central to President Obama’s legacy, took effect in 2013 with three main goals: expand coverage, improve quality of care, and lower costs.

To accomplish the first two of these goals, the ACA wielded a host of provisions and regulations. The most consequential of these, as discussed in Jonathan Gruber on Health Care Policy, Newsmakers premier are; the creation of online marketplaces in which people and businesses shop for insurance and can qualify for subsidies; standards of minimum coverage for every plan coupled with mandates that everyone has coverage and that every small business with 50 or more employees help provide coverage; the expansion of Medicaid, the government-run health coverage program for the poor.

The results of these efforts are greatly disputed. Democrats, who pushed the health law through Congress in 2009, highlight the 17 million Americans who gained health insurance. Republicans viscerally oppose the law (they have voted to repeal it over 50 times), pointing to the several million Americans whose pre-existing plans were cancelled due to the minimum coverage standards, large premium increases in many states, and hikes in deductibles and copays nationwide.

Kennedy hopes to build on the health law’s “huge gains” by ensuring that those who purchased coverage have access to it, and that doctors and clinics have adequate incentives to be in the market. “No piece of legislation is ever perfect,” he says. “You’ve got to find a way to work out some of those kinks.”

Kennedy and Gruber agree that political opposition to the ACA, mostly from Congressional Republicans, chips away at its effectiveness. The majority of the uninsured population resides in the 36 states that declined to create their own marketplaces—thereby defaulting to the federal one— and/or the 31 states that opted out of expanding Medicaid.

But the strongest opposition to the ACA, Kennedy warns, may be yet to come. “As much as we say it’s on stronger footing now, the fact of the matter is that if it’s a Republican President—Republicans are already controlling to houses of Congress. And they can vote right now to repeal it through the reconciliation process,” he says.

While the first two goals of the ACA pit Democrats against Republicans, the key provision in achieving the third goal, lower costs, pits elected officials and powerful interest groups against the law’s intellectual founders; the so-called ‘Cadillac’ Tax aims to reduce unnecessary healthcare spending by placing a 40 percent levy on employers who offer premium health care plans (applicable to the amount that the plan exceeds the high-cost threshold, which is $10,200 for individuals and 27,000 for families).

Labor unions and pro-business groups fiercely oppose the tax on the grounds that it would end generous employer health benefits, leading Congress to split with the White House and delay the tax’s implementation. Gruber, an MIT economist and key architect of the ACA, supports the Cadillac tax while Kennedy joined party leaders in voting to delay it.

Kennedy on Social Security

Social Security, a government-facilitated system of retirement payments to seniors, faces financial difficulties the next several decades. Projections from the Social Security Board of Trustees, as well as independent organizations, show that the reserves that accumulate from the payroll tax will dry up by the mid 2030’s, leaving Social Security partially insolvent. In other words, the money that workers and business pay into the system right now will be about 20% short if they are to receive the same payments as current seniors in the future.

Social Security was created amidst the Great Depression as part of FDR’s New Deal. The intention was to provide every American a secure retirement, and from 1946-1964, that was close to a reality, as the Baby Boom generation made it so that there was a ratio of five workers paying for one retiree. But now that Baby Boomers are retiring, and women are having an average two, rather than three children, there are three workers per retiree, and by 2030 there will be only two.

To meet these shortfalls, Kennedy expects reforms to Social Security in the future. “Every piece of seminal legislation always gets updated review to meet the current demands of society,” Kennedy says. “This has happened in the past with Social Security, it has happened with Medicare, Medicaid, and other government programs.”

President Obama, amidst peak budget negotiations with Congress in 2013, proposed slowing the rate at which the government increases Social Security benefits to adjust for inflation. But Kennedy favors raising taxes, or more specifically, the payroll tax cap, the level of income after which the payroll tax no longer applies, as opposed to cutting benefits. He suggests that an increase from $118,000 to $160,000 in the payroll tax cap would cover much of the program’s projected shortfall.

Kennedy on Trade

Trade has a massive and often overlooked influence on the US economy; as discussed in Newsmakers second volume, Thomas Knox on Monetary Policy and Debt, the challenge is balancing cheaper goods from abroad with job losses and downward pressure on wages at home.

However, the debate was brought into the political arena last summer, when the President asked Congress to grant him fast-track authority to negotiate the Trans-Pacific Partnership (TPP ), a trade agreement between the United States and 11 Pacific Rim nations. Concerning a variety of economic policy matters, the agreement encompasses 40 percent of world GDP, making it the most ambitious trade deal since the North American Free Trade Agreement in the 1990s.

Kennedy joined Democratic party leaders in an unsuccessful attempt to withhold fast-track authority from the President last summer, a strong show of disapproval for TPP. “Putting workers in the United States on equal footing with workers in Vietnam is a challenging prospect given the wage differential,” Kennedy says, adding that he supports free trade “as long as it’s fair.”

Proponents of TPP say the agreement will unlock economic opportunities for all countries involved. Knox implied he was in favor trade agreements such as TPP, saying they are part of the necessary work of embracing globalization, despite the challenges they present. On the other hand, opponents share Kennedy’s concerns that the agreement will cost American jobs and drive down wages.

“We’ve got to make sure that this agreement is going to benefit the United States as a whole,” Kennedy says, “not just particular countries or industries.”

As discussed in Newsmakers seventh volume, Lawrence Korb on Foreign Policy, proponents of TPP also make a foreign policy argument; they claim the deal will counter China’s inflating posture by allowing the United States to write the rules in the region. Kennedy acknowledges this argument “holds an awful lot of merit,” but asserts that it takes a backseat to the priorities of his 4th district.

“The administration’s touted the fact there’s been 18,000 tariffs that are going to be lifted,” he says. “That’s great. I also need to understand what that means for my district. If you’re talking about new access to dairy markets all over the world—we actually have some dairy in my district.”

When the final draft of TPP is released to Congress for a yes or no vote, Kennedy’s sticking point will be the enforcement mechanisms for the labor and environmental protections—two areas the President has claimed make TPP a good deal for American workers. “If you’ve traveled to any of those countries,” he says, “it’s hard to imagine that they are going to have an OSHA, and EPA, or other forms of strong, robust regulators that are going to have the force of law behind them to not just create these tenets, but enforce them and enforce them in a uniform way.”

Kennedy on Foreign Policy

On foreign policy, Kennedy’s views closely align with Korb’s; both support a more reserved use of military force, leaning toward protection and cooperation.

“You can do drone strikes, you can do Special Forces strikes, you can target heads of insurgencies,” Kennedy says. “Any military leader you talk to says that will buy you time to get to a political solution. If you do not have the prospects for a political solution on the ground, you will not end up solving the problem.”

Kennedy shares the consensus view that a host of US interventions in the Middle East, from military occupations of Iraq and Afghanistan, to airstrikes in Libya, and the hands-off policy in Syria, have failed to stabilise the region. More controversial is his view that in that in those interventions, military force appeared to be “quick fix,” only serving to mask the lack of a viable political end. “I’m not willing to invest US troops to say ‘Go clean up another Middle Eastern country for another decade and a half,’”he says.

Those who advocate a more aggressive application of military force, a policy deterrence and containment, argue military force is necessary to protect essential interests, despite its consequences.

Kennedy attributes the root of heightening conflict in the Middle East to the rapid dissemination of information exacerbated by weak governance. “When you combine the ability to organize with global ideas and people that are increasingly crossing borders you end up creating these circumstances that are ripe for rebellion,” he says.